Severance & Separation Agreements

If you are fired from your job, your employer might offer you severance pay and ask you to sign a “severance agreement” or “separation agreement.” Severance pay is money your employer offers to give you when you are fired or laid off, aside from the money the employer owes you for past work, unused vacation days, etc. You generally are not entitled to a severance package from your employer, but some employers offer it to get you to sign a separation agreement and give up your rights to sue your employer.

Separation agreements are contracts between you and your employer where you agree to give up some of your rights in order to collect the severance money or other benefits. If you sign a separation agreement, you may not be able to sue your employer for discrimination, retaliation, harassment, certain monies you believe you may be owed or other illegal conduct. Separation agreements may also prevent you from working for some other employers, or doing or saying certain things. It is a good idea to have a separation agreement reviewed by a lawyer before signing it.

Legal Editor: Daniel S. Braverman, January 2015 (updated June 2020)